Australian Prime Minister Anthony Albanese is expected to resist calls for a new tax on liquefied natural gas (LNG) exports in next week’s federal budget, bowing to concerns from key Asian energy partners like Japan, but facing growing domestic pressure from unions and independent politicians.
On Monday, Albanese hosted Japanese Prime Minister Sanae Takaichi in Canberra for annual leaders’ talks, marking 50 years of a landmark bilateral treaty. Japan relies on Australia for roughly 40% of its LNG supplies, making Tokyo wary of any market intervention that could threaten supply stability. Gas exporters, including Inpex which is partly owned by the Japanese government, have argued a proposed 25% export levy would undermine Australia’s reputation as a reliable seller.
Despite these claims being questioned by some analysts, Albanese appears unwilling to risk a backlash from Asian trading partners at a time when Australia itself is dependent on fuel imports amid the global oil crisis. “These agreements are to the benefit of both of our people,” Albanese said of the energy security deals signed on Monday.
However, the government faces mounting internal pressure. At a Labour Day march in Gladstone, independent Senator David Pocock addressed a rally organised by the Australian Manufacturing Workers’ Union, calling for the export tax. “We’re seeing record profits at the same time that so many Australians are struggling,” he said. The Australian Council of Trade Unions echoed this, with president Michele O’Neil stating that “multinationals should pay their fair share of tax, and that includes the biggest gas companies.”
While Albanese has ruled out the tax for now, analysts suggest the issue will persist, particularly ahead of Labor’s national conference in July. The government must balance international trade relationships with domestic demands for greater corporate taxation.
